Choosing A Financial Planner? Here Is How To Find A Competent One

You may be considering help from a financial planner for a number of reasons. Whatever your needs, working with a financial planner can help you. You should interview and evaluate several planners to find the right one for you. You will want to select a competent, qualified professional with whom you feel comfortable. Here are the most important questions to ask your prospective planner.

What is your educational background and what experience do you have? Find out what areas of study your planner has pursued; how long the planner has been in practice; and the number and types of companies with which she has been associated. Ask the planner to briefly describe her work experience and how it relates to her current practice.

What are your qualifications? Ask the planner what qualifies him to offer financial planning advice and whether he is recognized as a CERTIFIED FINANCIAL PLANNER™ professional or CFP® practitioner, a Certified Public Accountant-Personal Financial Specialist (CPA-PFS), or a Chartered Financial Consultant (ChFC). Ask what steps the planner takes to stay current with the financial planning field. If the planner holds a designation or certification, check his background with his professional organizations.

What services do you offer? The services a financial planner offers depend on a number of factors including credentials, licenses and areas of expertise. Financial planners cannot sell insurance or securities products such as mutual funds or stocks without the proper licenses, or give investment advice unless registered with state or Federal authorities.

How will I pay for your services and how much do you typically charge? As part of your financial planning agreement, the financial planner should clearly tell you in writing how she will be paid for the services to be provided. The most common ways are fees based on an hourly rate, a flat rate, and/or on a percentage of your assets and/or net worth. While the amount you pay the planner will depend on your particular needs, the financial planner should be able to provide you with an estimate of possible costs based on the work to be performed.

Could anyone besides me benefit from your recommendations? Some business relationships or partnerships that a planner has could affect her professional judgment while working with you, inhibiting the planner from acting in your best interest. Ask the planner to provide you with a description of her conflicts of interest in writing. For example, financial planners who sell insurance policies, securities or mutual funds have a business relationship with the companies that provide these financial products. The planner may also have relationships or partnerships that should be disclosed to you, such as business she receives for referring you to an insurance agent, accountant or attorney for implementation of planning suggestions.

Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career? Several government and professional regulatory organizations, such as the SEC, FINRA, your state insurance and securities departments, and professional organizations keep records on the disciplinary history of financial planners and advisers. Ask what organizations the planner is regulated by and contact these groups to conduct a background check. All financial planners who have registered as investment advisers with the Securities and Exchange Commission or state securities agencies, or who are associated with a company that is registered as an investment adviser, must be able to provide you with their disclosure form.

Can I have it in writing? Ask the planner to provide you with a written agreement that details the services that will be provided. Actually read it, don’t just recycle it. Keep this document in your files for future reference.

About the author

Michael J. Garry, CFP®, JD/MBA
Michael J. Garry, CFP®, JD/MBA

Michael Garry is a CERTIFIED FINANCIAL PLANNER™ practitioner and owner of Yardley Wealth Management in Yardley, PA. Michael is a NAPFA-registered Financial Advisor. He is a member of the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA).

Michael recently published his first book: Independent Financial Planning: Your Ultimate Guide to Finding and Choosing the Right Financial Planner

Michael is a frequent expert contributor to financial publications, and has also been quoted in The Wall Street Journal, USA Today, Money Magazine, Kiplinger’s, BusinessWeek.com, CNNMoney.com, Consumer Reports Money Advisor, Investment News, The Bucks County Courier Times, Financial Advisor, and other periodicals;

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